Daily Management Review

Deutsche Bank's profit fell by almost 100%


07/27/2016


Today, one of the leading banks of the world financial system, Deutsche Bank, reported a fall of its quarterly earnings by 98% to € 20 million. This sharp drop in profits was caused by the bank's anti-crisis restructuring programme, sale of the assets and litigation. After the statement was released, the bank’s stock fell by almost 5%; at that, market cap of Deutsche Bank fell more than 40% since the beginning of the year.



ell brown via flickr
ell brown via flickr
Today's Deutsche Bank report shows that in the second quarter of this year, pre-tax profit amounted to € 408 million, which is 67% less than in the second quarter of the previous year. Net profit for the quarter was € 20 million, which is 98% less than the year before. The bank noted that earnings have been significantly impacted by write-offs and costs of litigation. Write-downs of assets value during just one last quarter amounted to € 285 million, restructuring costs – to € 207 million, and costs of the proceedings - to € 120 million. Total bank revenues decreased by 20% to € 7.4 bln.

The bank’s new CEO, John Cryan commented on results of the second quarter: "Although our results show that we are still in a state of long-term restructuring, we are pleased with the progress. We continue to clean up our balance sheet from risky assets in order to invest in promising areas and to upgrade the infrastructure. However, due to the current difficult economic situation, we need to more actively move in the direction that we have chosen."

The ongoing crisis in the Deutsche Bank has been caused by a number of reasons. The problems began during the European debt crisis, which significantly affected Deutsche Bank’s value of assets, related to Italy and Spain. In 2015, the bank paid a fine of $ 2.5 billion to US and British regulators for a fraud with LIBOR rate. The same year brought another $ 260 million-worth fine imposed by the US authorities for violation of US sanctions against Myanmar, Libya, Sudan, Iran and Syria. In addition, the bank is still under suspicion relating to tax dodgers. This year, the bank has allocated to these cost € 5,4 bln. The ongoing problems have caused drop in Deutsche Bank’s shares - they fell by 41.3% since only the beginning of the year. In June, the IMF said that of all the world's major banks, Deutsche Bank is the greatest risk to the global financial system.

source: marketwatch.com






Science & Technology

Artificial Intelligence Helps NASA Find An 8th Planet In Orbit Of A Distant Star

Australian Research Success Could Mean Shatterproof Cell Phones Could Soon Be A Realityv

Top ten hi-tech events of the year

Tesla Considering Designing And Developing AI Chips On Its Own To Support Its Auto-Pilot Project

Verizon to introduce 5G in five American cities in 2018

Airbus, Rolls-Royce, Siemens to create an electric aircraft

Study Finds Treatment Efficacy Could Be Sacrificed For Reduced Side Effects In Cancer Therapies By Patients

Some Information About Their Self-Driving Car Research Has Been Disclosed By Apple Scientists For The First Time

A Massive Data Breach Was Covered Up By Uber By Paying Up Hackers

A City Is Can Be Converted To A Living Organism, Showcases China’s Huawei

World Politics

World & Politics

Phase Two Of Brexit Talks, Announced On Friday, Would Be Tough, Analysts Say

Elections in Italy: the last chance of Eurosceptics?

15 countries with the highest level of organized crime

Athens agreed with international lenders

EU Pressure Reportedly Forces UK To Bow Down, Could Agree To Pay £50bn For Brexit Divorce

$1 Billion Is The Price For Freedom For Arrested Saudi Prince In Corruption Crackdown: Reports

U.S. Capital Washington Appears To Be In Range Of The Latest Missile Launched By North Korea

Ten biggest fears of millennials